Geothermal Energy Unloved While Solar Steals the Show
NEW YORK (TheStreet) -- Geothermal isn't a dead-end technology limited to hot springs areas. Nor is it part of a dream of the distant future. It's an important and growing component of current U.S. energy grids, particularly in the West. More importantly, plants can be located almost anywhere; the technology is tested and ready to be built.
The problem is the industry is stuck waiting for the economic opportunity to deploy new facilities, partly as a result of inadequate state and federal policies and partly as result of the expense of developing and maintaining its wells and plants. Waiting patiently behind fossil fuels for the last 100 years for its moment to shine in the U.S. energy economy, geothermal finds itself playing second fiddle instead to newer technologies like solar and wind power.
Noting the sharply ramping growth of geothermal power globally compared to the relatively "anemic" growth in the U.S., Karl Gawell, executive director of the Geothermal Energy Association, laid the responsibility on the doorsteps of government policymakers.
"It really is going to depend on what happens at the state level and state policies drive the game," Gawell said in an interview with TheStreet. Citing policies at the state and federal level that favor either fossil fuels or emerging technologies, both of which largely ignore geothermal and nuclear power, Gawell added, "I think the whole thing is out of whack right now."
"Solar still gets a 30% tax credit," Gawell said. "One-third of the cost is paid for by the federal government right now."
That is the federal investment tax credit, extended by Congress to solar through 2016 for the purposes of development of its emerging technology. By contrast, wind and geothermal get what is termed as a production tax credit equal to 2 cents per kilowatt hour for the first 10 years of production.
Other tax benefits exist for renewables equally, including an accelerated depreciation benefit for installations.
Individual states' policies, including renewable energy credits, create further variations in the working environment for any particular renewable and complicate national deployment. In California, for instance, solar energy facilities do not pay property taxes, but geothermal plants do.
"You'll find often geothermal is the largest taxpayer in the county" where plants reside, Gawell said.
The Department of Energy currently has budgeted $45 million for geothermal for fiscal 2014, up from $35 million in 2013. However, that is largely allocated for research and development of long-term technology improvements and pilot projects, failing to address the problems the companies face in the immediate deployment of existing technology.